Canetic Resources Trust to acquire Titan Exploration Ltd. creating dominant position in strategic southwest Saskatchewan trend
2007年10月18日 - 9:29PM
PRニュース・ワイアー (英語)
CALGARY, Oct. 18 /PRNewswire-FirstCall/ -- (TSX - CNE.UN; NYSE -
CNE) Canetic Resources Trust ("Canetic") is pleased to announce
that it has entered into a pre-acquisition agreement (the
"Agreement") with Titan Exploration Ltd. ("Titan") pursuant to
which Canetic will make an offer to acquire all of the issued and
outstanding shares of Titan in exchange for 0.1917 of a Canetic
trust unit ("Canetic Unit") for each Titan Class A Share (TTN.A)
and 0.6609 of a Canetic Unit for each Titan Class B Share (TTN.B).
The total transaction value is approximately $116 million including
Titan's net debt of approximately $17.5 million. It is expected
that approximately 6.5 million Canetic Units will be issued to
effect the acquisition. The Board of Directors of Titan has
unanimously agreed to support the offer and has unanimously
resolved to recommend that all Titan shareholders tender their
shares in acceptance of Canetic's offer. FirstEnergy Capital Corp.
acted as exclusive financial advisor to Titan with respect to the
transaction and has provided Titan's Board of Directors with its
verbal fairness opinion that the consideration to be received by
Titan's shareholders pursuant to the offer is fair, from a
financial point of view, to Titan shareholders. The Agreement
provides for a non-completion fee of $3.5 million, payable by Titan
to Canetic in certain circumstances and a non-completion fee of
$1.7 million, payable by Canetic to Titan in certain circumstances.
The Agreement also contains customary non-solicitation covenants
and Titan has reserved the right, subject to certain conditions, to
respond to superior proposals, which Canetic has the right to
match. In connection with the offer, directors and shareholders of
Titan holding approximately 11 percent of the Class A Shares of
Titan and 9 percent of the Class B Shares of Titan (each on a fully
diluted basis) will enter into lock-up agreements with Canetic
pursuant to which they will agree to tender their Titan shares to
the offer. Full details of the offer will be included in a
take-over bid circular and related documents that are expected to
be filed with securities regulators and mailed to all Titan
shareholders on or before November 15, 2007. Under the terms of the
Agreement, Canetic's obligation to take-up and pay for the Titan
Class A shares and Titan Class B shares is subject to a number of
customary conditions, including the deposit of at least 66 2/3
percent of outstanding Titan Class A shares and Titan Class B
shares (on a fully diluted basis) to the offer and the receipt of
all required regulatory approvals. Upon completion of the Titan
acquisition, Canetic will acquire production of over 1,800 barrels
of oil equivalent ("boe") per day, weighted 63 percent to oil, and
a Canetic estimated 7.3 million boe per day of proved plus probable
reserves with a Reserve Life Index ("RLI") of approximately 11
years. Importantly, Canetic will also acquire over 49,000 gross
(23,700 net) acres, in the Leitchville area of Southwest
Saskatchewan, in close proximity to Canetic's existing 45,100 gross
(41,200 net) acres, to create a dominant position in the emerging
and strategically significant Lower Shaunavon trend. Current Titan
production in Southwest Saskatchewan exceeds 900 boe per day.
STRATEGIC RATIONALE Canetic continues to execute on its
multi-pronged strategy to develop and exploit its high quality
asset base while continuing to expand its opportunity portfolio
through the selective acquisition and consolidation of holdings in
strategic core areas and emerging plays. The Titan acquisition
provides an opportunity for Canetic to acquire and consolidate a
significant and controlling land position in the Leitchville area
of Southwest Saskatchewan, an area identified as an emerging play
with significant potential for ongoing development and long-term
reserve addition. Over the course of 2007, including a significant
land sale on October 1, 2007, Canetic has been actively acquiring
acreage on the Lower Shaunavon trend accumulating 19,760 acres to
date at a cost of approximately $24 million. The Titan acquisition,
in addition to the acreage acquired in October, expands Canetic's
identified drilling inventory in the Lower Shaunavon trend by more
than one third to approximately 300 gross (243 net) drilling
locations. The Titan lands serve to extend Canetic's existing
position to the south and strongly complement Canetic's existing
holdings in the area adding additional flexibility and control of
development with an average interest of approximately 70 percent on
lands held. The Lower Shaunavon trend contains large oil-in-place
reservoirs characterized by pay zones ranging from four to 16
meters in thickness with lower permeability and 22 degree API
crude. While development has taken place in the region for several
years it has been largely focused in the Upper Shaunavon due to
difficulty in producing from the Lower Shaunavon trend. However,
over this past year significant improvements have been made to
drilling and completions techniques with further improvements and
refinements expected as additional drilling and completions
activity takes place. These recent break-throughs in drilling and
completions techniques, similar to those being applied in the
emerging Bakken play, have proved key to the potential "unlocking"
of significant reserves and production in the Lower Shaunavon
trend. The Upper Shaunavon continues to offer significant potential
for enhanced recovery moving forward. Canetic's current development
plans in the Leitchville area contemplate the drilling of four
horizontal wells per section. Canetic has identified more than 240
net locations and believes that there are significant volumes of
original oil-in-place. Recent competitor drilling to seven wells
per section on parts of the play directly offsetting Canetic has
seen good initial success supporting Canetic's view that increased
well density, thicker pay and the potential for enhanced recovery
could also lead to substantial recoverable reserve additions over
time. In addition to the production and lands in Southwest
Saskatchewan, Canetic will also acquire approximately 900 boe per
day of production located in the northern regions of Alberta and
British Columbia. Approximately two-thirds of this production is
located in the highly sought after Peace River Arch region in close
proximity to Canetic's existing lands. ACQUISITION METRICS The
acquisition of Titan is expected to be accretive to Canetic's
production, reserves and cash flow on a per unit basis, based on
Canetic's current development plans and internal long-term view of
reserves, cash flow and production profile of the Titan assets.
Canetic anticipates it can significantly increase production and
reserves associated with the existing Titan assets and has planned
a comprehensive, multi-year development program, with particular
focus in the Lower Shaunavon trend. The total value of the
transaction is estimated at approximately $116 million, exclusion
of Titan's estimated land value of $25 million results in the
addition of over 1,800 boe per day at an average cost of $49,200
per boe per day and 7.3 million of proved plus probable reserves at
an estimated $12.50 per boe, based on Canetic's internal reserve
estimates. No value has been ascribed to the estimated $60 million
of existing tax pools in the determination of related acquisition
metrics. ADDITIONAL INFORMATION A powerpoint presentation
containing area overview maps, relevant development metrics and key
play characteristics is available for viewing by following the
related links on Canetic's website at http://www.canetictrust.com/.
Canetic is one of Canada's largest oil and gas royalty trusts.
Canetic trust units and debentures are listed on the Toronto Stock
Exchange under the symbols CNE.UN, CNE.DB.A, CNE.DB.B, CNE.DB.C,
CNE.DB.D, and CNE.DB.E and the trust units are listed on the New
York Stock Exchange under the symbol CNE. ADVISORY: Certain
information regarding Canetic, including statements relating to the
offer and the closing date thereof, production estimates, reserve
estimates, reserve life index, acreage to be acquired, business
strategy, benefits of the acquisition of Titan, drilling plans,
recovery estimates, cost estimates, production efficiencies may
constitute forward-looking statements under applicable securities
law and necessarily involve risks, including, without limitation,
risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, failure to
realize expected acquisition synergies, loss of markets, volatility
of commodity prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition, incorrect assessment
of the value of acquisitions, failure to realize the anticipated
benefits of acquisitions, ability to access sufficient capital from
internal and external sources, failure to obtain required
regulatory, shareholder and other approvals, and changes in
legislation, including but not limited to tax laws and
environmental regulations. As a consequence, actual results may
differ materially from those anticipated in the forward-looking
statements. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and
other factors that could affect Canetic's operations or financial
results are included in reports on file with applicable securities
regulatory authorities and may be accessed through the SEDAR
website (http://www.sedar.com/), the SEC's website
(http://www.sec.gov/) or at Canetic's website
(http://www.canetictrust.com/). United States Considerations The
offer will be made for the securities of a Canadian trust. The
offer will be subject to Canadian disclosure requirements that are
different from those of the United States. Financial statements
included in the takeover bid circular, or incorporated by reference
therein, as well as financial statements of Canetic, have been
prepared in accordance with Canadian accounting standards that may
not be comparable to the financial statements of United States
companies. It may be difficult for shareholders of Titan in the
U.S. to enforce their rights and any claim they may have arising
under the U.S. federal securities laws, since Canetic is located in
a foreign country, and some or all of its officers (if any) and
trustees and the officers and directors of Canetic Resources Inc.
may be residents of a foreign country. Shareholders of Titan in the
U.S. may not be able to sue a foreign trust or its officers (if
any) or trustees, or the officers or directors of Canetic Resources
Inc., in a foreign court for violations of U.S. securities laws. It
may be difficult to compel a foreign trust and its affiliates,
including its officers (if any) and trustees and the officers and
directors of Canetic Resources Inc. to subject themselves to a U.S.
court's judgment. DATASOURCE: Canetic Resources Trust CONTACT:
Investor Relations, (403) 539-6300, Toll Free - 1-877-539-6300, ,
http://www.canetictrust.com/
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